Home Money YouGov shares plunge 30% after profit warning

YouGov shares plunge 30% after profit warning

0 comment
YouGov was co-founded by former chancellor Nadhim Zahawi
  • YouGov flagged slow demand in its data products division

YouGov was co-founded by former chancellor Nadhim Zahawi

YouGov shares fell sharply on Thursday after the market research group warned that its annual profits and revenue would be lower than expected.

The company, which has been making headlines lately with general election polling data, pointed to sluggish demand in its data products division as well as “challenges” in its European, Middle Eastern and African markets.

YouGov said sales bookings had been lower than expected since it published its half-year results.

It now expects reported revenue for the year to be between £324m and £327m, around 5 per cent below forecasts.

Annual operating profit is expected to be between £41m and £44m, up from £48.3m a year ago.

The group’s share price fell 33.9 per cent late on Thursday morning to 542p, having almost halved in the last year.

Russ Mould, investment director at AJ Bell, said: “Casual YouGov observers might assume the company would enjoy a bumper election time, but its election operation makes a relatively modest contribution to the group’s revenue.”

Founded in 2000 by Stephan Shakespeare and former Conservative Party chairman Nadhim Zahawi, YouGov is well known in Britain for conducting online political polls.

Additionally, the group conducts surveys for large corporations such as social media app TikTok, brewing giant Molson Coors, Vauxhall Motors and Virgin Money.

Shakespeare stopped running the company on a day-to-day basis last November and handed the reins to Steve Hatch, a former executive at Facebook owner Meta.

Under Hatch, YouGov is looking to drive growth by expanding in the United States, where it hopes to capitalize on the upcoming US presidential election.

“In line with our stated strategy, the company had invested in the business to accelerate growth in the second half,” YouGov said.

‘As we move into FY25, we will focus on optimizing our cost base and prioritizing investment in key growth areas, such as upgrading our data products, continuing to develop our artificial intelligence capabilities, and improving our sales to further capitalize on YouGov’s unique asset: its high-quality Global Dashboard and proprietary data set.

YouGov said it continued to see increased demand for its bespoke research solutions.

However, sales in the data products division have remained sluggish and continued to see declines in rapid response research services.

AJ Bell’s Mold said: ‘The data analysis aspect is more important (than surveys) and this is where the company is struggling.

‘The company invested to achieve an expected growth acceleration in the second half of its financial year, which, as usual, did not materialise.

‘This may reduce some of the clamor for the company to move its listing to the US in search of a higher rating. The only reassuring element of the announcement is that the newly acquired consumer panel business is performing as expected.’

You may also like